Dear Ankita,
The fellow member (Ms Sapana) has clrearly explained you the LTA points (process, criteria, limitation etc.). I would like to add why your senior are looking tax exemption only on LTA? Though LTA is very good and acceptable mode of Tax Exemption, still there could be more options. Have you considered those points as well?
Now coming to some addition to LTA clarification, I would like to add (which I think missing above):-
The exemption is restricted to only two surviving children (unless, of course, the second birth has resulted in multiple children like twins and triplets).
LTA covers travel for yourself and your family. Family, in this case, includes yourself, parents, siblings dependent on you, spouse (even if your spouse is working) and children.
If your family travels without you, no LTA can be claimed. You have to make the trip.
LTA is not related to when you started your employment. The government fixes blocks of years. These blocks are as per calendar years (January 1 to December 31). The current block period is between 2014-2017 (as stated by Ms Sapna as well).
Generally, in a block period, for tax exemption an employee is entitled to two LTA claims. In most cases the tax exemption is allowed only agst submission of proofs, which seems to be justified. Otherwise how you will calculate the travelling amount only. (In our company the travel proof is must for tax exemption). Though the employee can claim the LTA as per his/her requirement, but the tax exemption will be allowed only for two claims in a block period. The amount of the excess journey (beyond two) will be countable for Income Tax in the F.Y.
The employee can claim two year’s LTA in a year and can submit adequate proofs to get Tax Exemption. If the proofs are lower than the LTA amount than the balance will be countable for taxable income in the F.Y.
But you cannot claim two year’s separate journeys in one year. Means the proofs must be related to one journey to get tax exemption in a single claim.
One LTA can be carry forwarded into next block period (for tax exemption), but same need to be claimed in the first year of next block period. For Example, if you do not take your LTA in 2014-17. Or you avail only one LTA. Than, you will be able to take the pending LTA in 2018. This means, in the 2018-2021 block, you will be totally entitled to the three journeys.
Even if you switch jobs, you can get the LTA not only from your present organization but also from your former employer, if the concession is lying unutilised for the block period.
The LTA can be claimed only if you applied for leave and have actually traveled. There is two separate processes for taking LTA and availing the Tax Benefits. In order to taking the amount is advance, the employee need to apply in the LTA Advance Form. In order to avail the tax exemption, the employee need to submit LTA declaration. The declaration should be comprises of family detail (as per eligibility, who took the journey), Traveling Cost and related travelling bills.
In case both (you and your spouse) are working, if you claim any LTA journey, than your spouse will not be able to claim the same holiday travelling cost from his/her employer. Unless, of course, you go for another holiday and he/ she claims it.
Last but not the least, I would like to suggest you to do home work to precise the points (my points and Ms Sapna points). May be some points have been repeated, or there may be some contradiction. The material is too long, you need to re-draft the same to frame a proper policy.
I have also taken the points from the site itself. But tried my best to narrate it properly and not to repeat the points as suggest by Ms Sapna.
I think it is more than enough to cover the topic.